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UNCLAS SECTION 01 OF 02 GUANGZHOU 030894 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
BEIJING FOR CG 
STATE FOR CA/VO, EB, AND EAP/CM 
USDOC FOR 4420/ITA/MAC/MCQUEEN 
USPACOM FOR FPA 
 
E.O. 12958: N/A 
TAGS: CVIS ECON ETRD CH
SUBJECT: IPod City - Consular Outreach to Foxconn in Shenzhen. 
 
REF: A) GUANGZHOU 30782 B) GUANGZHOU 031368 C) GUANGZHOU 018161 
 
THIS DOCUMENT IS SENSITIVE BUT UNCLASSIFIED.  IT SHOULD NOT BE 
DISSEMINATED OUTSIDE OF U.S. GOVERNMENT CHANNELS OR IN ANY PUBLIC 
FORUM WITHOUT THE WRITTEN CONCURRENCE OF THE ORIGINATOR.  IT SHOULD 
NOT BE POSTED ON THE INTERNET. 
 
¶1. (SBU) SUMMARY: Conoffs met with Foxconn executives August 25 to 
discuss ways in which we could work together to facilitate issuance 
of non-immigrant visas to the company's employees, the majority of 
whom - along with Foxconn's products - do not appear to be a 
Technology Alert List (TAL) concern.  Foxconn is still sensitive to 
prior allegations in the British press that it is a sweat shop and 
would only allow Conoffs to visit a high-tech, very automated 
assembly line for LCD screens. The company, which is the largest 
contract manufacturer in the world with projected revenues for 2006 
totaling USD 45 Billion, produces the iconic IPod as well as 
everything from LCD flat panel monitors to auto parts for Toyota. 
This is the second of three cables about the consular outreach trip 
to Shenzhen.  END SUMMARY 
 
Purpose - Corporate Outreach and Officer Education 
--------------------------------------------- ----- 
 
¶2. (U) This visit was part of an outreach trip organized by entry 
level officers (ELOs) in consular positions to better understand the 
South China business environment, major corporations' operations in 
the region, and corporate needs for travel to the United States. 
Companies selected - Wal-Mart Global Procurement (ref A), Foxconn, 
and Shenzhen Mindray - provided officers with a perspective on 
industries in the area, including those engaged in retail 
procurement, electronics manufacturing, and medical devices. 
Additionally, the three companies have a large and growing number of 
visa applicants in Guangzhou. Foxconn is a Taiwan company with a 
fairly transparent corporate structure.  It enjoys a very favorable 
relationship with the Chinese government because of the large number 
of jobs it has created and the tax revenue generated. 
 
Foxconn - Factory or City, Hard to Say 
-------------------------------------- 
 
¶3. (U) The sheer size of Foxconn's Longhua Campus is staggering. The 
company is currently the largest contract manufacturer in the world 
and the largest exporter in China.  The 10-year old Longhua 
manufacturing campus in Shenzhen covers 850 acres, has 68 buildings 
with 15 additional buildings currently under construction, and 
supports an employee base of over 240,000 at this location alone. 
In addition to manufacturing facilities, the campus has dormitories 
for single factory workers and first-year engineers, a hospital, 
numerous dining halls, banks, small shops, and recreational 
facilities. 
 
¶4.  (U) Conoffs and LES met with Vice President of Human Resources 
Dr. Jacob Chen and Vice President and General Factory Director 
Anderson Ho who asked a number of questions about visa requirements. 
 Responding to Conoffs' concerns about the lengthy stays of many 
Foxconn employees in the United States, Dr. Chen said that employees 
often needed to stay three-to-six months to create new product 
designs pre-production and to perform support staff training 
post-production.  He further stated he would like to work with the 
Consulate to standardize documents the company HR staff could 
provide the company's applicants to assure Conoffs of employment 
claims and travel purposes. 
 
¶5.  (SBU) Still sensitive to claims made in mid-June in the British 
newspaper The Mail accusing Foxconn of running a sweatshop at its 
Longhua campus, Dr. Chen declined to show Conoffs the company's 
signature IPOD assembly line, opting instead to show them Foxconn's 
newest factory, a vast collection of clean rooms and robotics 
building LCD screens for use in everything from mobile phones to 
computer monitors.  He proudly detailed Foxconn's plans to enter the 
LCD television manufacturing sector next year and commented that 
many of the buildings now under construction in Longhua were for 
that purpose.  Conoffs suspect that he wanted to display a high-tech 
factory - staffed completely by college-educated engineers in clean 
suits working with robotic assembly lines - to avoid questions about 
labor practices.  Dr. Chen mentioned that Foxconn still imports most 
of its high-tech manufacturing equipment from Japan and the United 
States. 
 
¶6. (SBU) Conoffs also had a chance to see Longhua's testing center, 
a modern, high-tech facility that tests all products built in the 
Longhua campus's factories to ensure that products do not interfere 
 
GUANGZHOU 00030894  002 OF 002 
 
 
with other devices or exceed noise requirements.  Conoffs also were 
shown products, both boxed and unboxed, going through simulated and 
real tests to determine tolerance to being dropped, knocked over, 
and crushed.  Dr. Chen offered Conoffs a chance to see Foxconn's 
worker dormitories but a tight schedule did not permit the 
inspection.  Commenting on housing conditions, Dr. Chen said workers 
lived four-to-six to a room and all rooms were air conditioned and 
had a bathroom. 
 
¶7.   (SBU) Dr. Chen said that Foxconn only hired from the top 30 
universities in China.  Starting salaries for engineers with 
bachelor-degrees is RMB 2500-3000 (USD 312-375) per month, plus 
housing and medical benefits.  Factory workers, whose average length 
of stay with the company is three years, are required to have a high 
school diploma and come primarily from the interior of China. To 
help retain its employees, Foxconn has training programs that can 
even lead to graduate and doctorate degrees from the prestigious 
Tsinghua University. 
 
SIPDIS 
 
Comment 
------- 
 
¶8. (SBU) Foxconn's campus was clean and well organized.  The town of 
Longhua around the factory campus, which used to be one of the more 
economically depressed in Shenzhen, is doing quite well due to the 
growing presence of Foxconn and its neighbor Huawei.  Foxconn 
executives recognize that Longhua lacks space for expansion, so they 
are building additional facilities elsewhere in China and in Russia, 
India, and Brazil to ensure access to large amounts of low-cost 
labor and a pool of well educated engineering talent. 
 
¶9. (SBU) Due to the technical nature of the company, Conoffs have in 
the past considered submitting visa Mantis SAOs for Foxconn 
employees.  However, Foxconn is not generally a TAL concern. It is 
primarily involved in contract manufacturing of consumer 
electronics; most of its products are designed by other firms. There 
seemed to be very few items which could be of military dual-use 
concern. 
 
GOLDBERG